It Was Good Living With You, (W)aha - Understanding Permian Gas Takeaway Capacity at Waha Hub, Part 4

The Waha Hub in West Texas figures to play a prominent role in supplying natural gas to Mexico soon, as pipelines connecting the Permian Basin to the international border are now complete and supplying small volumes to Northwest Mexico. As additional pipelines and power plants come online south of the border over the next 12 months, a meaningful ramp-up in flows from Waha to Mexico is expected. Facilitating those flows will be a Waha-area header recently built by a consortium of Carso Energy, MasTec and Energy Transfer Partners for Mexico’s Comisión Federal de Electricidad (CFE). With 6 Bcf/d of capacity and multiple pipeline interconnects, the header stands to dramatically improve interconnectivity among gas pipelines at Waha, but it has largely stood in the shadows of Mexico’s pipeline buildout. Today we continue our series on the Waha Hub with a look at CFE’s Waha header and its expected role in handling Permian-sourced gas.

Warning about today’s blog!

It is a subliminal advertisement for RBN’s new weekly fundamentals report — NATGAS Permian (click here for free trial) — that distills the flood of Mexico and Permian developments into a clear, concise view of Waha and the surrounding natural gas market. The report contains details and forecasts around natural gas production, demand, and pricing. It also offers a summary of pipeline outflows and capacities from the Permian to neighboring regions, outlining the key shifts in flows to the West, MidCon, and Texas intrastate markets. NATGAS Permian not only provides a summary of current fundamentals, it includes a detailed supply and demand forecast through 2019. The forecast includes an outlook for Permian production, exports to Mexico, demand and infrastructure. Importantly, the report translates the supply and demand forecast into a basis price outlook for Waha for the next two years.

In Part 1 and Part 2 of this series we highlighted how Permian gas flows to the Waha Hub and we explored the paths out of the basin. In Part 3 we looked at new intra-basin infrastructure designed to get gas from Permian production areas to Waha. We also covered how all of the new takeaway projects are aimed at moving gas either south to Mexico or east into Texas intrastate markets. Following up on that analysis, we now take a look at CFE’s Waha header and how it will facilitate flows to new pipelines in Mexico and potentially South Texas too.

Description and Status of the New Header

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